Emas Offshore warns against 'going concern issue' after Ezra's Chapter 11 filing

EMAS Offshore said on Monday evening the Ezra Chapter 11 filing may have a negative impact on the group.

"The company is therefore currently seeking advice on the Ezra Chapter 11 Filing, as well as assessing the impact of such filing on the group and on the group's ongoing initiatives to refinance its financial obligations and liabilities and the procurement of additional working capital facilities," it said.

The offshore marine construction contractor said it will work closely with its principal bankers to review all options to continue its ongoing initiatives.

"In the event that these efforts do not achieve a favourable and timely outcome, the group will be faced with a going concern issue," it said.

According to its statement filed to Singapore Exchange, as at Nov 30, 2016, Emas had about US$170 million owing to Ezra, of which US$125 million was subject to a deferred payment over a period of three years.

In addition, Emas has about US$566 million of loans owing to financial institutions, of which about US$242 million of loans are guaranteed or secured by securities provided by Ezra, and about US$193 million of loans are jointly guaranteed or secured by securities provided by Ezra and itself.

Emas also has substantial charter hire liabilities valued at about US$231 million as at end-November, relating to charterparty agreements it had entered into. Of these, about US$119 million are guaranteed solely by Ezra and about US$58 million are jointly guaranteed by Ezra and itself.

Emas said the Ezra Chapter 11 filing may constitute events of default under the various facilities and charterparty agreements, and the moratorium afforded under the Ezra Chapter 11 filing does not suspend claims against Emas in these areas. However, Emas is not aware of any demand made by financial institutions over the bank facilities as a result of Ezra's Chapter 11 filing, it said.